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TMX to launch private markets business for startups, entrepreneurs

TMX Broadcast Centre in downtown Toronto October 22, 2013 2013. Photo by: Fernando Morales/The Globe and Mail.

Fernando Morales/The Globe and Mail

The operator of Canada's largest stock exchange is looking to help small private companies raise money and evolve into public companies.

TMX said Tuesday the new business will give investors "access to unique investing opportunities."

"Working with registered dealers, the launch of TSX Private Markets will assist private companies in accessing capital in the key early stages of their development," said Kevan Cowan, president of TSX Markets and group head of equities at TMX Group.

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"On the execution side, we believe that private markets in Canada stand to benefit from and complement the proven success of our premier public markets."

TMX Group, which operates the Toronto Stock Exchange, said it plans to launch TSX Private Markets in the third quarter of this year, pending regulatory approval. It will be overseen by its subsidiary, Shorcan Brokers Ltd., along with a registered exempt market dealer.

Last week, the Ontario Securities Commission proposed new rules to allow startups and early-stage businesses to raise up to $1.5-million a year from individuals through registered crowdfunding web portals.

Under the proposed OSC rules, investors would be limited to a maximum of $2,500 in a single investment and $10,000 per year.

It also proposes either allowing a company to raise money based on comprehensive disclosure documents or allowing family, friends and business associates to more easily invest in start-ups and early stage businesses.

Other jurisdictions including Saskatchewan, Manitoba, Quebec, New Brunswick and Nova Scotia are also considering the new rules.

The proposed changes are subject to a 90-day public comment period closing June 18.

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Websites like Kickstarter have raised the popularity of crowdfunding, which allows entrepreneurs to pitch their ideas directly to large numbers of consumers, who then invest typically small amounts in the startup.

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